At first view, the HSBC Direct Online Savings site is both attractive and functional.  As you begin to look at what HSBC has to offer it becomes even more attractive on a savings front. 

HSBC offers one of the best rates for interest in any of the current online savings through September 15, 2008 of 3.5% as compared to ING at 3.0% and then it become variable. 

When opening account it allows three choices – savings, payment, or CD account.  The site is very open regarding personal information and the fact they will need many forms of identification to ensure a customer’s privacy and security.  They also inform first time customers this will apply to businesses as well as individuals.

When you open an account, it currently lists six steps needed in order to open an account.  Reading other reviews from people who have accounts say this is the longest application process out of all of the online banking systems taking approximately two weeks to take care of all the paperwork.  The application must be completed within thirty days or the process begins again.

On the plus side there is no minimum balance or monthly maintenance fees and interest is accrued monthly.  It also only takes one dollar to open the account.  However, a customer cannot close an account within six months or a fee will be incurred.  However, charges for NSF fees, chargebacks, and stop payments are significantly less than my current brick-and-mortar bank.

Once a customer has signed up at HSBC Direct, the account which is funding HSBC will receive two trial deposits under one dollar.  These will need to be confirmed on the HSBC Direct Account.   Please be careful when doing this.  A customer will only have three chances to correctly enter the deposit amounts and then if not done correctly, your HSBC Direct account will need to be funded by a snail mail check. 

With an HSBC account, a customer can set up a recurring transfer from the account funded from and the amount you want to transfer and how often – from every week to quarterly.  There is no fee to set this up. 

Help is easy to come by either via the Internet or by phone, both in the U.S. and outside the U.S.

Security issues are always suspect when someone is dealing with their money online.  However, HSBC does a good job of using Firewalls to block virus and worms from their sites and has SSL encryption to keep you safe.  Because they use 128-bit encryption, access to a browser which can do that is necessary or upgrade so this is possible. 

HSBC has a new Security Key which is required for their Personal Internet Banking Bill Pay Service.  This helps to keep the password from being hacked by keylogging software.  This type of software used by hackers actually monitors keystrokes to get password information. 

However, if it takes too many log-in attempts to log on, HSBC will immediate disable online access and the only way to re-establish it is to contact them.  They will then send a password via snail mail.  However, with an ATM card associated with this account, the password can be changed electronically.

This may seem excessive to some people but to me, I want more security to keep the money I make from winding up in someone else’s hands. 

Withdrawing money is simple.  It can be done via ATM (if the customer has opted for a card), transferred to any linked account, or by snail mail check.

An added plus to the ATM card is though there are no charges to use the ATM card through a HSBC ATM, there will be fees if money comes from a non-HSBC ATM.  However, HSBC will fully reimburse the customer for up to three U.S. non-HSBC ATM charges per month which will post on the first business day of the following calendar month.

All-in-all, HSBC has many good things to offer a customer who is looking for online savings – good rates, easy transfer capabilities to linked-in accounts, and security.  Good reasons to bank with anyone I believe.

If you happen to turn on CNBC, listen to a radio show about investing, or read any financial newsletter or magazine, it’s not going to be long before you see and advertisement about some company which will show you how you can invest in gold and other precious metals to make a lot of money by doing it. They have really come up with some great advertising, but when taking off the front the realities of investing in precious metals is that choosing to buy gold is a good way to keep your money stable, but not necessarily the greatest long term investment

Companies which are hoping to get you to buy gold as an investment will tell you all kinds of statistics which shows that the US economy is going on a path of self destruction. They will show you the massive trade deficit that the United States has, the massive Budget Deficit that the United States has, and argue that over the next few decades the US economy is going to take a major down turn, and that the US Dollar will be practically worthless and that gold will hold its value. Here are the realities. In all of modern history, we’ve had a budget deficit, a trade deficit, and problems with the government. Our dollars still have value. Yes, the dollar has lost some of its purchasing power because of inflation over long periods of time; however by making good investments, you will stay several percent ahead of inflation.

They will tell you that gold is a great investment which keeps its value unlike the US Dollar which loses money to inflation. This statement is one hundred percent true, but the only thing gold does is keep its value. If you put your money in good mutual funds with long track records, you can easily make 12% on your money. There are many great mutual funds with ten and twenty year track records which have performed close to 15%. Gold has return barely above the rate of inflation coming in at 3% or 4% annually. Even if dollars are less valuable over time, investing in solid investments will give you a lot more purchasing power.

Gold investors will also tell you that during a disaster in which the economy collapses that you will be able to use gold to buy goods and services. Let’s look at the example of Hurricane Katrina. Instead of trading small amounts of gold, people bartered with goods which had use, such as bottled water and firearms, rather than a precious metal which did not do any good at the time. If you did choose to buy gold however, it’s likely that whenever a new fiat currency is established, gold will still have a decent vlaue in the new currency since it’s prices are based on international demand, thus buying gold is a great way to avoid the impacts of a currency collapse.

Capital One is relatively new bank coming existence back in 1989. It has a number of different subsidiaries and offers dozens of financial products. It currently has about 15,000 employees and has an annually revenue of $10.7 billion dollars. It’s headquartered in McLean, VA and its current CEO is Richard Fairbank. Oddly enough, Capital One is the fourth largest customer of the US Postal Service.

Capital One Direct Banking’s high-yield money market account offers a lot of useful features for customers. In addition to having a relatively decent interest rate, it has no fees to speak of and no minimum balance. You can transfer money to and from your accounts at banks through electronic transfers (ACH) and your money is FDIC insured up to $100,000.

Another great feature of their account is that they give you check writing privileges and an ATM card. With most online savings banks, you have to wait three or four dates for your money to be transferred electronically. If you need your money in a pinch to pay for an unexpected bill, you can simply write a check and take care of it with money from your money market account.

Capital One certainly doesn’t have the highest interest rate out there, but it’s definitely up there. Currently it offers a rate of 3.50% APY, and the standard for premium rates is about 3.75% APY. It’s not that much of a difference when all is said and done until you start looking at extremely large account balances.

They have excellent customer service to go with their online savings account. BankRate.com gives them a customer service rating of five out of five stars. This is an extremely rare and prestigious rating to receive from the definitive place to compare banking online. Discussions I’ve had with Capital One Direct Banking customers have indicated that they have had some very positive experiences with Capital One’s customer service.

There really are now downsides to the account. It has all the features one would want, as well as great customer service. The rate’s not at the top of the market, but the difference in rates are minimal.

Looking for a new checking or savings account?  Unhappy with your bank and want to switch?  Just like credit card companies compete with one another with their rewards programs, banks compete with each other for new customers by offering sign-up bonuses.  Here are several institutions, banks, and online payment companies that are offering cash bonuses when you open a new account with them:

IngDirect Savings and/or Checking Accounts: 

If you are referred by a current ING account holder, you can get a $25 bonus for opening either a savings or a checking account through ING (with a minimum opening deposit of $250).  I have an ING account with both a savings and checking account and love them both.  It’s online banking at it’s best.  For the few bills I pay each month that don’t actually let me pay online, I just fill in a “check” through my ING account online, and they physically print and mail it for me (I don’t even pay for the stamps).  There are a number of other benefits with the ING bank accounts, including above average interest rates you earn on your money, and the ability to make direct deposits into other people’s bank accounts without paying any fees (like an e-check).  If you want to get a referral to receive your $25 sign up bonus, email ggreenblog@hotmail.com and let him know!

Bank of America Personal Checking Accounts

Open a Bank of America personal checking account before July 31st, 2008 and use offer code AOU260508 to receive a $75 sign up bonus.  You can apply online or at your nearest Bank of America location, but you will only qualify if you do not already have a Bank of America account.  Student checking accounts also will not apply.

Wachovia Checking Accounts

Have a Wachovia account?  Refer a friend and you both get a $25 bonus, in the form of a Wachovia prepaid Visa card, when the friend opens their checking account.  If you don’t have an account already, find someone who does to give you a referral certificate (printable right from the Wachovia website) and you can both earn $25 for the time it takes to print out the form and fill it in.  Can’t find anyone with a Wachovia account?  This person will find one so you can get the bonus (and so can the other guy!): maximizingmoney@gmail.com

Keybank Student Checking Accounts

Need a student account?  Students who sign up for the Keybank Free Student Checking Package (pretty much everything you need, including a checking account, debit and credit card) will receive a free 4GB iPod nano.  Offer expires August 28, 2008.

Midwest Bank

New customers opening a checking and relationship savings account with Midwest Bank get a $100 bonus when you set up the checking account to have a direct deposit.  Only one $100 bonus allowed per household.

 Sovereign Bank

Students who open a checking account with Sovereign Bank with a minimum of a $10 deposit and sign up for the Visa CheckCard are rewarded with a $24 iTunes gift card bonus.

Westbridge Bank and Trust

The Westbridge Bank and Trust wants to help you pay for your gas.  Open an interest checking account (current interest yield of 3.55%) and receive a free $50 BP gas card as a sign up bonus.  If you have some money to store in a CD, open an 18 month CD with a minimum of $5,000 (at 3.65%) and receive a $100 BP gas card bonus.

Prosper.com recently sent out emails to everyone in the state of South Dakota and informed them that they would no longer be accepting citizens from South Dakota as lenders on their website. They claim there are complicated lending practices which make it excessively difficulty to operate in the state, which is odd, since many major credit card offering banks have headquarters in South Dakota because of their favorable lending laws.

Here’s the email:

Dear Matthew,

We are writing to inform you that Prosper is discontinuing lender activity in South Dakota for the time being. South Dakota lenders will no longer be able to bid on listings or transfer money into their Prosper account.

South Dakota is the only state where, due to state lending restrictions, its residents are unable to borrow through the Prosper marketplace. We felt that the cost and effort involved in maintaining the complicated compliance requirements for lender activity alone in that state was impractical at this point.

Prosper will continue to act as loan servicer (i.e., collections and disbursements to lenders) for any existing loans you own, and you can withdraw any funds you have in your Prosper account at any time, as usual.

We hope to bring person-to-person lending (for lenders and borrowers) to residents of South Dakota in the future. Please be assured we will keep you fully apprised and we thank you for being a member of the Prosper community. If you have any questions, you can contact Lender Services at 877-646-5922.

Regards,
Prosper

With the recent bank failures of Indy Mac and Bear Sterns, many people have wondered how safe their money is. Others, such as Citibank and Bank of America, have also been hit pretty hard by the falling out of the sub-prime mortgage market, and many are wondering if their savings with these banks are safe. Fortunately your money is insured up to $100,000 in savings and for those with more than that there are various moves one can make to increase that amount, such as making use of the CDARS program.

If you’re a saver and have made all the right moves and make sure that all of your money is insured either by the Federal Deposit Insurance Corporation (FDIC) or National Credit Union Alliance (NCUA), this is an absolute great time to be a saver in certificates of deposit and online savings accounts.

The Financial Times of London recently reported that many major banks in the United States have billions of dollars worth of debt, a lot of which is related to real estate, that will be maturing over the next few months and they will need to scramble to refinance it. Since the lending market is not nearly as favorable now as it was a couple of years ago, they will have much higher costs in funding loans and thus need to raise capital. One of the best ways for them to do that is to attract additional savings deposits and the best way to do that is by raising interest rates.

There’s already been an increase in certificate of deposit interest rates by about 0.5% in the last three and a half months and chances are additional rate hikes will be coming soon from a number of different banks to attract more deposits additional deposits. We’ve already seen a few online savings accounts raise their interest rates to attract new deposits. For example, Washington Mutual raised their interest rate to 3.75% just a few weeks ago.

How does this affect you as a saver? If you’re planning on getting a long term certificate of deposit in the near future, it might make more sense to purchase a 3 month CD and wait and see where interest rates are at then. You could easily get another 50 basis points in interest on your money. If your savings is in an online savings account, you might want to consider switching banks to a company offering more competitive rates if your bank doesn’t keep up. Either way, it’s a great time for savers.

If you’re looking for great interest rates on Savings and CDs, head on over to our friends at Bank Deals for a listing of banks offering great interest rates.

About a year and a half ago, the world of banks offering online savings accounts was shaken up by a new competitor, First National Bank of Omaha. They entered into the online savings market through a division they now call FNBO Direct. We decided to review their no-fees, no-minimums 3.50% APY savings account.

First National Bank of Omaha is a very well established bank. It’s the third largest privately held bank in North America and has over $17 billion in managed assets. It has offices in Colorado, Illinois, Iowa, Kansas, South Dakota, and Texas. It has about 7,500 employees and a number of subsidiary companies. It’s the fifth largest in house credit card processor and the sixth largest merchant processor. Oddly enough, First National Bank was the first United States company to use fuel cell technology as a primary power source. This bank is not the biggest, but it’s certainly no small potatoes.

The account it self offers a very competitive rate of 3.50% APY. This is about where the top of the market sits right now with a couple of exceptions, but those are really just promotional rates to grab in new customers. When FNBO Direct entered the market a year and a half ago, they were at the top of the interest rate ladder offering 5.25%, and as the Federal Reserve has dropped interest rates, they have continued to remain near or at the top.

The account has some pretty standard features otherwise. You need $1.00 to open the account, and after opening it there are no fees to speak of and no minimum balance required to earn interest. Interest is calculated daily and paid monthly. You will receive an ATM card that you can use at any of their ATMs for no fee and can make up to 5 withdrawals totaling $1000 per day. In order to deposit money you can use electronic transfers, wire transfers, direct deposit, or you can mail them a check.

Although the operation is only a year and a half old, First National Bank of Omaha already has a lot of online experience from their other divisions. FNBO Direct makes use of the Cashedge transaction system which isn’t the most pleasant thing in the world, but it gets the job done. Overall it seems like a very good account with no drawbacks, a great interest rate, and a very good feature set.

Transportation Alliance Bank (TAB) is one of many banks offering online savings accounts. They were once at the top of the interest rate ladder at 5.25%, but as interest rates have fallen, they have failed to remain competitive and are only offering 3.00% APY on your money. To open an account there is a $25 initial deposit and there’s a $1.00 minimum balance in order to receive the 3.00% APY interest rate. There are no monthly fees.

Transportation Alliance Bank’s premium savings account doesn’t have the best feature set in online banking. You cannot sign up for the account online, and instead have to mail or fax the application in. In addition, you have to fill out another form and mail/fax that in to have your ACH transfers setup. On the ACH form, it states that ACH transfers cannot exceed $1,000. This could be a big problem for any savers with a significant amount of money. There’s an option for Transportation Alliance Bank to use what they call an Express ACH with a higher rate, but according to the application for that Transportation Alliance Bank will do a hard credit pull on your account which will be detrimental to your credit score for the next several months. You can’t even apply for electronic transfers until 90 days after opening the account. There’s a $2.00 fee for outgoing ACH transfers and incoming ACH transfers are free.

Incoming wire transfers are free, but outgoing wire transfers cost $15.00. The interest is compounded on a daily basis and credited monthly. You won’t be able to withdraw money from the account until 10 days after opening the account; subsequent deposits can be withdrawn after three business days.

Some other details from the FAQ and fee schedule about these accounts include: Incoming wire transfers are free. Outgoing wire transfers cost $15. Interest on a Savings Account is compounded daily and credited monthly. Initial deposits that are not guaranteed funds have a 10 business day hold before they can be withdrawn. Most future deposits may be withdrawn after three business days. A paper statement will be issued to customers on a monthly basis.

Transportation Alliance Bank is one of many “virtual” banks which are designed to operate entirely on the bank’s website or by the phone. The bank does have a number of financial service centers that are staffed with support staff and sales associates that market the bank’s products. They have centers in Utah, Kentucky and Georgia. The bank has been a FDIC member since 1998 and it has a total of $466.6 million in assets. Bankrate gave Transportation Alliance Bank a rating of 4 out of 5 stars on their website.

After considering all of the paperwork hassles you have to go through in order to get an account along with its maximum ACH transfer limits, it’s just not worth your time. There are better online savings banks that offer similar rates with much less hassle.

E*Trade gained its popularity by creating an affordable investment solution for technically savvy individuals. The company allowed individuals to self-direct their own retirement plans and do a lot of the work over the internet. Now E*Trade is following suit with many other financial institutions and offering their version of a high-yield savings account, also known as an online savings account. Their product, the “Complete Savings Account” is similar to other high-yield savings accounts, but does it shine above the others?

For quite a while, E*Trade was considered to be a very solid company. It was founded in 1982 by William Porter and Bernard Newcomb. In 1993 it was one of the very first companies that offered online trading services through CompuServe. The company went public in 1996 and has only grown since then. In the last year or so, there has been some serious questions about E*Trade’s financial stability because of some major write-downs of subprime mortgages. Fortunately your money is insured by the FDIC up to $100,000 if E*Trade were to ever go under.

The “complete savings account” has a lot of benefits. E-Trade’s account features exceptionally fast online transfers, and even guarantees that no interest will be lost because of transfer time. In addition, if you have an E-Trade brokerage account, you can transfer money to your brokerage account instantly. This is good if you want to make a purchase in the market and time is of the essence. In addition, ETrade does not perform a hard credit pull so your credit score will not be affected if you open an account with them.

If you have at least $5000 in your savings account, you can get a free linked checking account and a debit card that offers an unlimited number of rebates other bank’s fees. This means you could withdraw money from any ATM without ever paying a fee.

The current interest rate being offered by e*Trade is 3.30%. This is a very decent interest rate in today’s market considering that ING Direct and Emigrant Direct are both offering 3.00%. It’s not the highest interest rate available, but it’s definitely up there.

There are some questions about their customer service overall. From what we can tell, there’s not a separate customer service department for their savings products and there have been some reports of it being hard to get useful, informed support from them. If you are seriously considering opening an account with them, you might want to call up their customer service line and ask a couple of simple questions to see how painful of an experience it is to get help from them.

If you have an ETrade account already, opening one of these accounts makes good sense. It’s a good account with pretty solid features, but there are some slightly better interest rates available elsewhere.

Because interest rates have fluctuated quite substantially from bank to bank in the last year, consumers are finding themselves having savings at banks and credit unions which used to have some of the best interest rates around, but no longer do. Some banks are offering above market rate interest rates to their savings and CD customers so that they can get an in-flux of capital, while others have less of a desire to attract new customers don’t have as competitive of an interest rate.

The first place many savvy consumers head to when shopping for a new certificate of deposit or savings account is BankRate.com. With IndyMac and Bear Stearns recent failures, consumers want to ensure their money is at institutions with solid financials. BankRate offers a listing of interest rates on varying types of accounts as well as a rating system to give consumers an idea of how healthy the bank is financially, unfortunately, it cannot be trusted.

Consumer advocate, Clark Howard, recently reported that before IndyMac’s failure, it was a pretty loosely held secret within the banking industry that IndyMac was facing severe financial trouble. Up until the day that IndyMac closed its doors, it had a “Superior” rating according to BankRate.com’s “Safe & Sound®” rating system.

The Safe and Sound® rating system that BankRate provides might offer some insight as to the health of a bank, but it’s not be be-all and end-all. In order to make sure your money in savings is secure, you need to do two things. First, make sure that the bank is a FDIC member of a NCUA member. This will provide insurance if the bank fails and provide you up to $100,000 of coverage. Special situations exist where that number can be raised. The second thing you should do is never keep more than $90,000 inside any one bank. This ensures that your principal and interest will be protected.

You shouldn’t be terribly concerned about bank failures, because they are such a rare occurrence. The FDIC usually provides you access to your funds within a period of 24 hours anyway, so it’s a very seamless transition for you. Just ensure that your bank is a FDIC member or NCUA member and that you don’t keep more than $90,000 in any one bank and you’re good to go.